Crony Capitalist

ST. LOUIS, Mo. -- John Kerry and John Edwards will be duking it out for a little while yet, which means there will be populist rhetoric aplenty on the campaign trail. "At the heart of this campaign," Kerry said at his Seattle victory rally on Tuesday night, "is a commitment to fairness for all, not privilege for the few." Speaking earlier that evening in South Carolina, Edwards decried, as he always does, the division of the nation into "two Americas," one that receives tax breaks and has access to doctors, the other that sees its wages stagnating and has to wait in emergency rooms to get medical care.

For some, this means that Democrats are again hearing ancestral voices prophesying class war. Joe Lieberman spoke for the populist-phobes when, campaigning last Sunday, he voiced his fear that "some of the other candidates . . . are drifting toward outdated class-warfare arguments."

It was Lieberman, of course, whose arguments Democratic voters judged to be outdated or worse, but the notion that populism is a hoary chestnut is still gospel at some centrist think tanks and editorial boards. Listen to them and you'd think the Democratic presidential candidates were echoing William Jennings Bryan's call for free silver.

But the Democrats' populism isn't a matter of genetics, of a nostalgic reversion to a century-old battle against the House of Morgan. It is, to the contrary, a specific response to immediate policies of the House of Bush. It is a counter to the administration's tilt toward drug companies and HMOs at the expense of consumers. It is a necessary corrective to the most plutocratic administration since at least the 1920s.

Given the choice between serving the national interest and favoring the rich, George W. Bush has opted incessantly, even obsessively, for the latter.

That is the main reason why he may well be unseated in November. If Bush tax policies are not class warfare, then the term has no meaning at all. Moreover, in the age of globalization, the interests of many U.S.-based corporations grow increasingly divergent from those of the American people.

It's not that these corporations have not resumed hiring, but much of that hiring takes place abroad. A new survey in the Financial Times of the 100 largest American companies notes that they paid 30.6 percent of their 2003 income in taxes, down from 33 percent in 2002 -- a change that the Times attributes to their increasing share of economic activity overseas. The administration's response to the challenge of "outsourcing" has been to slash taxes on investment, even as investment in corporations has less and less to do with creating jobs here at home.

What the Democrats' neo-populists are taking aim at isn't business as such, of course, but policies that reward outsourcing and do nothing to foster employment in the States. "This has nothing to do with class warfare," Kerry told supporters in St. Louis last week. "There are great companies and great CEOs throughout America, and I don't want us to be a Democratic Party that loves jobs and hates the people who create them."

Edwards hasn't felt the need to qualify his populism to this extent, and he is hoping that his differences with Kerry on the trade issue in particular will win him support from some industrial unions. Such support would almost surely be too little and too late to deprive Kerry of a victory in Saturday's Michigan caucuses, but it would be one way those unions could send a message to Kerry that they'd like him to pick Edwards as his running mate.

But the differences between Edwards and Kerry on trade are nowhere so great as Edwards suggests. Though he criticizes Kerry for voting for NAFTA, Edwards himself held no public office at the time. Both senators did support normalizing trade relations with China, however, when the legislation came before the Senate near the end of Bill Clinton's presidency.

The chief difference between Edwards and Kerry isn't on trade, or the fact that Edwards ran stronger on Tuesday in two states that Bush is sure to carry in November. It's that populism is Edwards's sole calling card -- one that wins him, but also limits his, support. Kerry, too, attacks the fundamental unfairness of economic life under Bush,
also is bristling with a martial toughness and experience almost reminiscent of the original Southern Democratic populist, Andrew Jackson. In a word, Kerry is a two-fer while Edwards is a one-fer -- my most succinct explanation of why Kerry, not Edwards, will probably be the party's nominee.

And as to why I think Kerry could beat Bush this fall, I suppose it's because Kerry is a national capitalist, who favors a role for government in boosting the domestic economy, while Bush is a crony capitalist who wants only to privilege the privileged. It's not that Kerry and the Democrats are reverting to an ancient politics. It's that plutocracy breeds populism, and under Bush, plutocracy is what we got.

Harold Meyerson is the Prospect's editor-at-large. This column originally appeared in The Washington Post

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